Prepaid card products have achieved a critical level of industry, marketplace and consumer acceptance and usage. They can now be considered a stand-alone payment category. The growth of these cards and related transaction volumes has been accelerated by the emergence of new participants (issuers and processors). The new participants use non-standard platforms, applications, devices and connectivity protocols. Despite the increased number of participants, the non-standard implementations of such prepaid card systems by the various new participants have actually limited the broad-based usage (activation, load and settlement) of such prepaid card products.
One commonly used prepaid card is the Starbucks™ card. The Starbucks™ card can be loaded or reloaded with value, but only in Starbucks™ stores. The Starbucks™ prepaid card cannot be used in other stores such as grocery stores.
While prepaid cards such as these are useful, a number of improvements can be made. For example, some have expressed concerns about possible fraudulent use and possible money laundering. Since prepaid cards like the Starbucks™ type cards are not tied to their owners and are like cash, it is difficult to monitor their usage. Also, like cash, if a Starbucks™ type prepaid card is lost, the finder of the card can simply use the card. The true card owner cannot retrieve the lost value on the card. Lastly, with respect to the Starbucks™ type of prepaid card, one cannot go to another merchant such as McDonald's™ to load or reload the prepaid card with value. Prepaid cards of this type can only be used by the companies that issue them.
Another type of conventional prepaid card can be used at different merchants, and is initially purchased at a store. Money is paid to the store clerk and the consumer takes the card home. To load the card, the consumer calls a phone number to load the card and to link the load transaction to the card. The money is moved a few days (typically 2-5 days) later to the issuer of the card and the card is ready for use.
There are also a number of drawbacks associated with this type of transaction. First, the clearing and settlement process takes a fairly significant amount of time. As noted above, the clearing and settlement process can take between 2 and 5 days, which is quite long. Second, the activation process for the prepaid card is quite complex. Multiple steps are needed just to activate the card. Third, for each merchant that wants to participate in the system, a separate data feed needs to be established between the merchant and the system. This is cumbersome and costly and limits participation in the system.
It would be desirable to provide for methods and systems that use prepaid portable consumer devices, such as prepaid cards. The methods and systems would increase the number of participating merchants, issuers, acquirers, and consumers. The methods and systems would also preferably use a payment processing network that uses standardized methods and rules. The methods and systems may also allow an owner of a prepaid card to potentially regain the value associated with a lost card, and to allow for the monitoring of prepaid card transactions.
Embodiments of the invention address the above problems, and other problems, individually and collectively.